Keeping up with home repairs and maintenance can be a challenge. Not only do home and property owners need to have the time to make repairs and improvements, but they also need the skill set that each task requires. In many cases, they turn to handymen to help.
So, if you’ve got the skills to fix, build, and tinker, and you’re ready to turn those talents into a thriving business, starting a handyman business can allow you to be your own boss and use your hands to create success. This guide aims to be your one-stop shop for all things related to launching your handyman enterprise, no matter where you’re starting from. Let’s roll up our sleeves and get into the nuts and bolts.
Business Overview
Handyman services businesses offer a variety of maintenance and repair services encompassing everything from very small tasks to much larger projects. Handymen are often regarded as being talented in multiple areas of building repair and maintenance; a single handyman may be able to put up drywall, install a tile floor, fix a leaky faucet, and much more. When compared to professional contracting services, plumbers, and electricians, handymen typically have lower rates, but they also lack the licensing required to do larger projects in these areas. Instead, they’re sought as an affordable solution when a project doesn’t require a specialist or a building owner can’t wait for a specialist to be available.
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Industry Summary
The handyman industry is a segment of the broader construction and property management sectors. It includes not only independent operators but also franchises and larger companies that offer a range of services. The industry is characterized by low barriers to entry, with many handymen learning their trade through on-the-job experience rather than formal training.
While information on the general handyman industry is hard to find, IBISWorld reports the handyman service franchise industry has grown consistently over the last five years and generates $5 billion annually.
The expansion of the construction industry and spending on home improvements largely drove this growth.
Industry Trends
One of the key trends in the handyman industry is the growing demand for eco-friendly services. More homeowners are seeking out professionals who can help them make their homes more energy-efficient or use sustainable materials.
Additionally, the advancement of technology has made it easier for handymen to connect with customers through online platforms and apps.
Target Market
The target market for a handyman business is typically broad and diverse, encompassing anyone who needs assistance with home repairs or maintenance. However, there are specific demographic groups that are more likely to seek out these services:
- Homeowners: This is the most obvious group. Homeowners often lack the time, skills, or tools to perform necessary repairs and maintenance, making them frequent customers of handyman businesses.
- Landlords and property managers: These individuals often own multiple properties and need regular maintenance and repair services. They may not have the time or ability to handle these tasks themselves, so they turn to handyman businesses.
- Seniors: Older adults may struggle to perform home maintenance tasks due to physical limitations or safety concerns. As such, they often rely on handyman services.
- Busy professionals: People with demanding jobs may not have the time to deal with home repairs and would rather hire a professional to take care of it.
- Real estate agents: They often need handymen to fix up properties before they go on the market or to handle repairs requested by home inspectors.
- Small businesses: Some small businesses may not have in-house maintenance staff and will hire a handyman for occasional repairs or improvements.
While these groups represent the primary target markets, a handyman business can also serve others, such as apartment dwellers who need help assembling furniture or hanging artwork. Each handyman business may have a different target market depending on its specific services and location.
Checklist To Start A Handyman Business
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If you’re thinking about starting your own handyman business, there are a few things you should keep in mind. Here is a checklist of the essentials to get started.
Step 1: Assess the Market
Before starting any business, including a handyman business, it’s crucial to conduct thorough market research. This research serves several purposes:
Determine demand: Market research helps you understand if there’s enough demand for your services. The success of your business relies on having enough customers who need your services and are willing to pay for them.
Identify competition: Understanding the competitive landscape can help you position your business effectively. You’ll want to know who your competitors are, what services they offer, and how their pricing structures work. Online reviews and their websites can provide a lot of insights.
This research can also give you insight into whether the market is already crowded with similar businesses and breaking in might be tough. Conversely, identifying an underserved niche can present an opportunity.
Focus your services: Your research can also help you identify which services are most in demand, allowing you to focus on those areas and meet your potential customers’ needs more effectively.
When starting your own handyman business, you’ll want to think about the type of services you offer. Handyman services aren’t all the same, and finding a business model that works for you is important. Maybe you’ll want to focus on working on weekends when homeowners tend to be home. This business model allows you to start this service part-time on the side while still working another full-time job.
Other service models may be a better fit. If you’re a versatile “jack of all trades,” then you could market yourself as a “do it all” handyman and build up your roster of returning clients. Remember that, depending on the type of work, you may need to hold multiple trade licenses.
Alternatively, you may want to market yourself as being a solution to niche needs. With this model, you can focus on perfecting one skill, like installing tile or installing TVs. You’ll only need to invest in minimal tools, and as you perfect the skill, you’ll become faster (and better) at the work.
Step 2: Write a Business Plan
Crafting a well-thought-out business plan for a handyman business is an essential step in moving forward after you’ve conducted market research and can see that there are customers that want your services. Just as a skilled handyman wouldn’t dare arrive at a job site without a hammer, wrench, screwdriver, and other essential tools, an entrepreneur should not embark on a business journey without a comprehensive business plan.
While this step isn’t required to start a business, let’s look into why writing a business plan is worth your time.
Roadmap for success: A business plan serves as a detailed guide, outlining the goals, strategies, and steps needed to grow and sustain the business. It’s the GPS system that helps you navigate the entrepreneurial landscape.
Gets ideas out of your head: By putting thoughts and ideas down on paper, you make them tangible, testable, and refineable. It helps transform abstract concepts into actionable plans.
Enhances funding opportunities: Should funding be needed, a well-written business plan is a must have. It shows lenders that you’ve thought through your business, have a clear strategy, and the business can be profitable.
Related: How to write a business plan
Step 3: Form a Business Entity
Starting your own handyman business is an exciting step, but it’s important to set it up correctly from the start. Every state is different, but there are several items to complete to make sure the business is legal to operate. Here is a general overview of the options:
Choose a business structure: One of the first decisions you’ll need to make is choosing a business structure. Your choice of business structure will affect taxes, liability, and other factors. The four main types for a handyman business include:
– Sole proprietorship: This is the simplest structure and is often chosen by individual handymen. It offers ease of startup and lower cost but doesn’t provide liability protection.
– Partnership: If you’re teaming up with someone, a partnership may be appropriate. It allows shared control and responsibilities. Like the sole proprietorship, there is no personal liability protection for the owners.
– Limited Liability Company (LLC): An LLC offers the liability protection of a corporation but with less complexity. It’s a common choice for small businesses, including handyman services.
– Corporation: Though less common for a handyman business due to its complexity, a corporation offers strong liability protection.
Each of these structures has its pros and cons, and the right choice will depend on your individual situation. For many handymen, the sole proprietorship and LLC are the most popular.
Related: Comparison of business structures
Business name registration: After registering the business structure, you may need to register your business name. This process will vary depending on what business structure you pick. Sole proprietors and partnerships will often be required to register a “Doing Business As” (DBA), while corporations and LLCs register with the state during the formation process.
Related: Tips and ideas for naming a handyman business
During this time, it’s also a good idea to check if the name you want is available as a web domain, even if you’re not ready to set up a website yet.
Related: Finding a domain name for your business
Obtain general business licenses and permits: There are a variety of general license requirements to verify before starting. This could include a business license, seller’s permit, and Employer Identification Number (EIN).
Obtain specialized permits: Depending on your services, you may need specific permits such as for electrical or plumbing work. Licenses and regulations for handyman businesses vary from state to state, county to county, and sometimes in each town where your customer is located. Also, a contractor’s license will be needed as a handyman in some areas.
In Illinois, for example, a handyman business doesn’t need a state license, but if you are going to perform certain types of work, such as plumbing, electrical, or roofing, licensing will be required. In some towns, a contractor’s license will be required to do work in each town work is being done, so it’s important to check with state, county, and local licensing requirements.
Related: What licenses does a handyman need?
Step 4: Set Pricing
Determining the right pricing for a handyman business is a skill that requires careful consideration, as it directly impacts your profitability and competitiveness in the market.
Here are some tips that can guide you in setting the right prices for your handyman services:
Understand Your Costs
– Materials: Keep track of the cost of the materials you use regularly.
– Labor: Calculate your hourly wage or that of your employees.
– Overhead: Include the cost of running your business, such as transportation, tools, advertising, etc.
– Profit margin: Decide on a reasonable profit margin that aligns with industry standards.
Analyze the Competition
– Research local rates: Find out what other handyman services in your area charge. Ensure that your prices are competitive but also reflective of your skills and experience.
Consider the Complexity and Scope of Work
– Simple repairs: These can often be priced on a per-job basis.
– Complex projects: These might require a detailed estimate, factoring in potential challenges and specialized skills.
Value Your Expertise
– Experience matters: If you have certifications or specialized training, don’t be afraid to charge a premium for your expertise.
– Quality of work: If you provide exceptional service and quality work, this should be reflected in your pricing.
Offer Different Pricing Models
– Per hour: This is common for smaller, well-defined tasks.
– Per project: This works well for larger jobs where the full scope is understood.
– Retainer or subscription: Offering ongoing maintenance services can be priced as a package or subscription.
Provide Transparent Estimates
– Clear breakdown: Offer your clients a clear and detailed estimate, breaking down materials, labor, and other costs.
– Communicate value: Make sure the client understands what sets your services apart and justifies the price.
Remember, pricing is more of an art than a science. It’s about finding the balance between what your services are worth and what your customers are willing to pay. Don’t undervalue your work as low-priced can be seen as low quality, but ensure your prices are fair and competitive.
Related: How to set your prices as a handyman
Step 5: Set up Operations
Setting up operations is the next step we will cover when starting a handyman business. It’s more than just having the right physical tools; it’s about structuring your business for efficiency and growth.
As it’s common to start off working out of the home, the first thing to consider is setting up shop. At a minimum, you’ll need a secure space to store your vehicle, tools, and equipment when they’re not in use. This could be a garage, a rented storage unit, or a commercial space.
You will also need a place to handle administrative tasks. This can be a spare room or a portion of a room set aside for your computer, phone, paperwork, and other office essentials. It’s where you’ll handle scheduling, invoicing, and customer service, so optimally, it should be a comfortable and organized space that’s free from household distractions.
Another operational consideration is setting up various tools to help run the business. A few types include:
Scheduling software: Scheduling tools can automate appointment bookings, send reminders, and allow clients to reschedule, helping you stay organized, so you can focus on the work. Jobber and Housecall Pro are two popular programs.
Invoicing and accounting software: Platforms like Wave Accounting (FREE) or Quickbooks can manage invoicing, expenses, and even tax preparation, giving you a clear picture of your financial health.
Related: How to start a handyman business while working full-time
Step 6: Create a Marketing Strategy
While word-of-mouth and customer referrals will eventually drive traffic to your business, it’s important for a new handyman business to have a strategy to begin promoting the business. A few common strategies include:
Creating a professional website is first on the list. It serves as a digital storefront where potential clients can learn more about your services, see examples of your work, and contact you directly. Affordable solutions include; WordPress, Square, and Wix.
A popular (and free) online marketing method is to claim your business profile. These allow your business to appear in local search results and maps, providing visibility to potential customers in your area. These platforms allow customers to leave reviews, which can be a powerful marketing tool for your business. Popular directories include Google Business Profile, Yelp, Angie’s List, and the Yellow Pages.
Social media is another powerful online marketing avenue. Platforms like Facebook, Instagram, and Twitter offer opportunities to interact with customers, showcase your work, and build your brand.
Joining your local Chamber of Commerce is a great way to get in front of business owners and professionals in your community and can increase your business’s visibility.
Business cards and flyers are also valuable tools. Distribute them in strategic locations such as hardware stores, community centers, and local businesses. Signage on your vehicle can also make a low-cost marketing option that will be seen by potential customers, especially while parked at the customer’s house, and the neighbors ask about the quality of work.
Another proven strategy is partnering with local businesses or real estate agencies. These partnerships can lead to referrals, providing a steady stream of clients.
Finally, consider direct mail campaigns. Sending postcards to potential clients in your target market can grab attention and generate leads.
Remember, the goal of marketing is not just to attract new customers, but also to retain existing ones. So, ensure you provide excellent service to turn first-time customers into loyal clients.
Related: How to find handyman jobs
Step 7: Get Business Insurance
There are several types of insurance to consider when starting a handyman business. A few of these include:
– General liability insurance (sometimes called handyman insurance) protects the business if a customer is injured due to the handyman’s work or property damage. This policy can help cover expenses like legal fees and medical bills.
– Worker’s compensation insurance helps cover expenses like lost wages and medical bills that can occur if an employee is injured while at work.
– Commercial auto insurance helps cover related expenses if the business vehicle is in an accident.
Like the business’ location and the value of its vehicle, multiple factors will affect the cost of these policies. Request quotes from multiple providers to get the best idea of insurance costs. Don’t just look at how the premiums compare, but also consider other elements like coverage limits, exclusions, and deductibles.
Related: What types of insurance does a handyman business need?
Step 8: Prepare to Launch!
As you prepare to open your handyman business, there are likely some loose ends to tie up. The needs of every business will vary, but here’s an overview of the final steps you might need to address:
Creating contracts: These are agreements between you and your clients detailing the scope of work, payment terms, and other conditions. Legal advice can help ensure these contracts protect your interests.
RocketLawyer and Law Depot have free and inexpensive templates that may be helpful.
Opening a bank account: A separate business bank account helps keep personal and business finances separate, simplifying bookkeeping and tax filing.
Accepting credit cards: Many customers prefer credit card payments for convenience. You’ll need a merchant services account or a mobile payment platform like Square or Stripe to accept these payments.
Related: Common mistakes made by handyman businesses
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Common Questions When Starting A Handyman Business
How much does it cost to start a handyman business?
Starting a handyman business can be a financially manageable endeavor for those who plan wisely. The total costs to launch such a business can typically range from $2,000 to $10,000, depending on various factors. Here’s a breakdown of the main expenses to help you assess the initial investment required.
Tools and equipment: $500 – $3,000
Quality tools are essential for a handyman business. Your initial investment in tools may vary based on what you already have and the specialized services you plan to offer. From hammers and drills to ladders and saws, these are essential assets.
Vehicle: $0 – $50,000
If you already own a suitable vehicle, this cost may be negligible. However, you may need to invest in a reliable vehicle and/or trailer to transport tools and materials to job sites.
Business licensing and permits: $50 – $500
The cost of obtaining the required licenses and permits will vary by location and the specific services you provide. Research local regulations to determine what’s necessary for your area.
Business insurance: $300 – $800
Initial insurance costs are essential for safeguarding your business. Liability insurance is generally required, and the cost will depend on your coverage needs and location.
Marketing: $100 – $1,000
A basic marketing plan to promote your business might include business cards, a simple website, and local advertising. The cost can fluctuate based on your specific strategy and how much you do yourself.
Office supplies and software: $50 – $400
Setting up a home office space and investing in basic management software can streamline your business operations. This category includes items like a computer, printer, scheduling software, etc.
Other costs: $100 – $300
This could encompass anything from uniforms to small miscellaneous expenses needed to establish your professional image.
Beyond these initial investments, it’s also a good idea to have three to six months of operating expenses on hand as a buffer. This safety net can help you navigate unexpected expenses, fluctuating income, and the natural ebbs and flows of starting a new business.
How profitable is a handyman business?
Handyman services can see different profits depending on their location, the type of services offered, and even the years that the business has been in existence. Home Advisor reports that handymen charge between $60 to $125 per hour and the average project (time and materials) is $390.
Generally, the revenue can be calculated by considering the number of jobs, the average rate charged, and the hours worked. A common formula to estimate the profit would be:
Revenue = (Number of Jobs per Week x Average Rate per Job) x Weeks Worked
Expenses = Fixed Costs + (Variable Costs per Job x Number of Jobs per Week x Weeks Worked)
Profit = Revenue – Expenses
For instance, if a handyman starting out is taking on 5 jobs per week, averaging 3 hours each, charging an average of $75 per hour, they would make $1,125 per week or $56,250 a year (assuming 50 weeks)
Expenses for a handyman business can include tool costs, transportation, insurance, marketing, and more. Here’s a rough breakdown:
Tools and Equipment: $2,000 per year
Vehicle (including maintenance and fuel): $5,000 per year
Insurance: $1,000 per year
Marketing: $2,000 per year
Miscellaneous (office supplies, software, etc.): $2,000 per year
Adding these up, the total yearly expenses would be approximately $12,000.
Therefore:
Revenue: $56,250
Expenses: $12,000
Profit: $56,250 – $12,000 = $44,250 annually
It’s important to note that this is a rough estimate. Actual earnings can vary based on factors such as the specific area you operate in, your skill level, the services you offer, local competition, and the efficiency of your operations. Operating costs can also vary widely depending on whether you’re a sole proprietor working out of a home office or have a dedicated business location and employees.
This is another reason why doing a detailed business plan and financial forecast is important before starting your business.
What skills are needed to run a handyman business?
Starting a handyman service doesn’t require a business degree, but certain skills and experiences can increase the chances of the business becoming a success.
Repair and maintenance experience: Firsthand experience in building repair and maintenance is one of the most valuable assets that a handyman can have. Formal training or apprenticeship in the home repair trades is another great advantage that will leave a handyman well-prepared for some of the challenges of this career.
Scheduling and estimating skills: The ability to accurately estimate both the cost and completion time of a project is important and can help keep handymen profitable while preventing overbooking.
Customer service skills: Handymen need to be able to interact with customers professionally and address customer concerns. Experience or skills in customer service can help to retain returning customers.
Attention to detail: Details matter in building repair and maintenance, so handymen need to be focused and attentive to ensure their jobs are done correctly and well.
Problem-solving skills: Handymen work on many different projects, and they can never know just what to expect from a job. Thinking on their feet and identifying and solving problems can help them impress customers and do quality work.
Management experience: If business owners plan to hire a team of handymen or apprentices, previous experience in hiring, training, and managing employees will help.
What is the NAICS code for a handyman business?
The NAICS code for a handyman business is 236118, which is classified as a Residential Remodeler.
The NAICS code (North American Industry Classification System) is a federal system to classify different types of businesses for the collection and reporting of statistical data.
